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5G mobile - the next tech frontier

As the multi-billion dollar Ultra Fast Broadband network stretches from cities into the country's smallest settlements, New Zealand faces its next big telecommunications infrastructure build — 5G mobile.

The effect of 5G on mobile internet is often compared to changing from using a garden hose to a fire hose.

It is now being developed internationally and New Zealand has big calls to make on how it is delivered.

News last week that the Trump administration in the United States is debating whether the federal government should fund its 5G network build directly (for reasons of national security) comes as multiple markets gear up to begin testing and international standards are negotiated.

The new Minister of Communications, Clare Curran, must soon decide how to make the required radio spectrum available to carry the 5G network and whether a kind of NZ-Inc approach, with the Crown and telecommunications companies working in concert to avoid duplicating investment in facilities to house tens of thousands more small cell sites and boxes, is necessary.

She had her first meeting with telecommunications sector chief executives last week and 5G was on the agenda. A new government Chief Technology Officer will be appointed soon, with preparations for 5G a priority for the role. An official from the Ministry of Business, Innovation and Employment was in South Korea last week for an international standards meeting focused on 5G.

New Zealand has a "work programme underway" involving the Department of Prime Minister and Cabinet and MBIE to look at the security of the country's internet-capable devices.

Simultaneously, the Commerce Commission is about to reveal the extent of its review of the country's mobile telecommunications sector, an inquiry which could determine whether the mobile market is in the right shape to deliver 5G.

The Australian government has begun a round of consultation with the industry on 5G and in Britain its development has been accorded high priority.

While the New Zealand build is unlikely to cost in the multi billions of dollars like UFB, it will be a substantial investment of many hundreds of millions for private companies as it is rolled out between 2020 and 2025.  

Its most obvious presence may be thousands of new micro-cell sites, some upgraded from existing facilities but many more placed on every third or fourth lamp post, traffic lights or other structures in city environments.

For consumers and businesses it will mean mobile internet could soon start to catch up to the performance of the fixed fibre broadband. It would enable not just better and faster use of consumer data on the move but also the development of the Internet of Things (where all kinds of products function remotely) and even systems for driverless cars, smart cities and video surveillance.

The land-based UFB fibre network (and its Rural Broadband Initiative cousin) were Crown-led initiatives which over seven years have extended fibre broadband availability to about 1.1 million households (70 percent). The Government underwrote the $2.3 billion network build. Chorus and utility providers carried out the project with special funding as late as last year to accelerate fibre to small rural towns.

"The real benefit that comes from only building one network is you get economies of scale. You could build it slightly smaller and it would not cost you as much. The downsides are really about ensuring there's competition among the players."

— TUANZ chief executive Craig Young

UFB has been a success, and when complete will place New Zealand high in world broadband rankings after countries like South Korea, Hong Kong, Japan and Singapore. It is in stark contrast to the Australian NBN broadband project which has had repeated rethinks, cost issues and stuttering progress.

The New Zealand industry is divided on the best strategy for bringing in 5G. Existing mobile services, and 5G, do link to the fibre network and can use power and sites already used by the system to move data as rapidly as possible from the radio waves and onto fibre.

Chorus, which has built the majority of the UFB network, believes there is a risk of New Zealand ending up with duplicate or even triplicate 5G infrastructure. Its chief executive, Kate McKenzie, said last month: "If as a country we are paying for things three times over, that is a poor way to deliver an important service. We can already see the impact in the costs of mobile data in NZ, where at one extreme we rank 33 out of 35 in the OECD for value.

"The other impact from leaving the provision of essential services to the market," she wrote in a contributed article for Stuff.co.nz, "is that, quite rightly, commercial organisations go where there is money to be made. That means duplication of infrastructure in cities, and little focus on rural areas, for example.

"Chorus thinks there should be a dialogue about the rollout of 5G, with the aim of ensuring high quality services are made available more broadly and more cost effectively, through a smart industry structure that also limits the need for subsidies by simply being more efficient overall."

Spark's chief executive Simon Moutter had already rejected that sentiment, saying "suggestions from Chorus that 5G mobile services should be rolled out in New Zealand by a monopoly network similar to fixed-broadband are entirely self-serving and not in the interest of consumers".

"A monopoly is and always should be the last resort option for a market, not the first as Chorus is proposing.... Any suggestion that taxpayers should be asked to pay for a 5G monopoly in our country is ludicrous."

The Telecommunications Users Association (TUANZ) chief executive Craig Young says the country is in a good place because of the success of the UFB rollout. "This has been a really good investment and has set us up well."

He says the latest programme, using money allocated by the government last year to take UFB to small communities around the country, was an example of the government and industry coming together to ensure a network was built economically for all. 

"There's no reason why Chorus could not build a 5G network," he says, adding a caveat: "but it would be better if the three mobile operators (Spark, Vodafone and 2 Degrees) wanted one built by Chorus."

"The real benefit that comes from only building one network is you get economies of scale. You could build it slightly smaller and it would not cost you as much. The downsides are really about ensuring there's competition among the players."

Curran says she has an open mind on the best method of deployment of 5G. "I've not heard from Chorus yet on the detail of any proposal they are putting together."

"I'm not seeing close parallels between 5G and UFB. The main [telecommunications] provider was Telecom and it was not prepared to build a fibre-to-the home network and that's where the Government stepped in.

"With cellular, we have three mobile providers and I'm hearing from them that they are planning to invest in 5G. There would be very strong public interest [needed] to over-ride private companies that are wishing to invest."

"How much can you drink from a fire hose at the same point of time. How do you serve the customers all that capacity?"

— Spark general manager of networks Colin Brown

She is thinking beyond the build. "You cannot just build a network and expect magically everything to be transformed. We have got to have an active policy approach for new innovation and new industry to occur." The 5G network would be a "radical step-change" presenting opportunities beyond the Internet of Things and Virtual Reality and into "things that have not been invented yet".

Planning was underway to make the correct bands of spectrum available for when 5G will be needed. "Access to the spectrum is a key regulatory hurdle we are preparing for and MBIE has taken some steps to clear the spectrum for 5G."

She didn't know if an auction system, as used for 4G, would be used. Labour had argued when 4G was auctioned that some spectrum ought to have been held back by the government for the future, but that was ignored.

There was unlikely to be a financial windfall for the Crown. Although 4G raised big headline numbers, the money was paid over a long period. "It looks big on paper but the actual amount that comes in every year is not all that huge."

Spark's general manager of networks, Colin Brown, said the company had spent much of last year understanding the "technological evolution and standards and how the technology is going to turn-up at a radio access level, what our use of a cell site might look like in the future".

Spark has considered how it might work with "parallel providers of infrastructure, like electricity providers" to extend its cell site network. 5G, with superfast broadband speeds over the air, would change how people used wireless technology.

The garden hose to fire hose analogy for the potential volume of data under 5G was one thing, he said, but "how much can you drink from a fire hose at the same point of time. How do you serve the customers all that capacity?".

International mobile providers were likely to trial 5G at events such as the Commonwealth Games on the Gold Coast in April and the Fifa World Cup in Russia mid-year.

Mobile providers would need not only greater capacity but a reduction in 'latency', or any delay, on the network to deliver on the promises of 5G. 

He said Spark would be able to fund development of its 5G network under its existing capital expenditure formulas, with some deployment late next year, rollout in 2020 and mass rollout by 2022. 

Chorus's head of network technology, Martin Sharrock, said in some parts of the world there was talk of "fibre or 5G" but New Zealand's UFB development meant our market would have both and be able to free up capacity on one to help the other. "I think we have this wonderful synchronising of UFB and 5G."

Chorus already worked with mobile operators sharing use of cell site power and fibre and its "cabinetised fibre" had gone out to 95 percent of its network. "UFB is going to have laid the foundation for the building of the 5G network. Fibre to every site, every cell, every cabinet, every business and every home, and all three [mobile] network operators would be sharing that just as efficiently as they can."

Sharrock said the country needed to debate "who runs the 5G network, who deploys the cell sites and the electronics that makes the cell sites work". Because of UFB fibre, it would be far more cost-effective in New Zealand than it would be elsewhere.

* Chorus is a Foundation Supporter of Newsroom.co.nz and was approached for comment on this story in the same manner as other parties.

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